Argentina buys wine from Chile to face shortfall in production

Still hurting from a yearlong drought, Argentina is turning to Chile for wine imports in order to keep up with popular demand for wine.

Wine production in Mendoza, the heart of Argentina’s Andean wine region is down 30%, or 3 million litres.

The average production level in normal years is 15 million litres.

This is the first time since 1993 that Argentina, the fifth largest producer of wine in the world, has relied on imports from neighbouring Chile to compensate for shortages.

“Importing wine from Chile reduces total cost by 15 to 20%” said Guillerma Garcia, president of the National Institute of Vitivinicultura (INV). Chilean wine imports amount to just 2 percent of total wine production in Argentina, he added.

“We’re talking about an area of 900,000 hectares in Argentina that has lost 60% of its red wine production,” said Javier Merino, director of Argentinean wine consultants.

“This is inevitably going to result in a 60 to 70% rise in prices.” But with major wineries stocking their shelves with Chilean wines, prices should remain stable.

Three of Mendoza’s largest wineries - Ferrovica, Penaflor and RPB Baggio - purchased 160,000 litres of red wine from Chile, said Merino.

Ferrovica plans to order another 300.000 litres this week, the Argentine press reports.

The value of Chile’s wine exports has jumped sharply the past 20 years, from about 2 million UUS dollars to 1.5 billion last year.

The United Kingdom, for example, now imports more wine from Chile than from its closer neighbour South Africa.

Although Chile is best known worldwide for copper production, wine, fruit and forestry products account for about a quarter of all exports.